Conflict of Interest

10 Key excerpts on "Conflict of Interest"

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  Scientific Integrity

  Text and Cases in Responsible Conduct of Research

  • Francis L. Macrina(Author)
  • 2014(Publication Date)
  • ASM Press

    (Publisher)

  Basic research workers have a tradition of free inquiry and free exchange of ideas, united in a shared purpose to create knowledge, to critique existing knowledge, and to disseminate knowledge. The image of the eccentric scientist lacking worldly aspirations and living in a cloistered ivory tower has given away to that of a greedy entrepreneur, insensitive to the public good. Science and science administrators have promised, and the public has come to expect, products of research and technology that improve the quality of life and spur economic growth. The public has called upon scientists to discover means to prevent or cure cancer, diabetes, heart disease, mental illness, aging, and moribund obesity and lavishes great rewards upon those who appear to achieve these goals. It is a small wonder then that some scientists have lost their innocence and fallen afoul of matters related to conflicts of interest.

  Definitions

  “Conflict of Interest” or “financial Conflict of Interest” is a legal term that encompasses a wide spectrum of behaviors or actions involving personal gain or financial interest. The definition of Conflict of Interest, including the scope of persons subject to the provisions in a code or set of rules and regulations, varies according to state and federal statutes, case law, contracts of employment, professional standards of conduct, and agreements between affected parties or corporations or both. A Conflict of Interest exists when an individual exploits, or appears to exploit, his or her position for personal gain or for the profit of a member of his or her immediate family or household. The identification of members of the immediate family and household is in a state of flux, but these individuals include the spouse and minor children living at home. Case law is evolving with respect to dependent parents, adult children living at home, and “significant others.” Another critical component of Conflict of Interest pertains to the undue use of a position or exercise of power to influence a decision for personal gain. Many conflict-of-interest codes also prohibit activities that create an appearance of a Conflict of Interest. Full disclosure may be the only means to combat perceptions of undue influence.

  For researchers, the federal policies on conflicts of interest that have the broadest reach are those of the National Science Foundation and the U.S. Department of Health and Human Services. The latter policy applies to research scientists and institutions receiving funds from agencies of the Public Health Service (PHS), including the National Institutes of Health (NIH), the world’s largest grant funding agency. The PHS policy, published under the moniker of “Promoting Objectivity in Research,” was significantly revised and reissued in the 2011 Federal Final Rule on Conflict of Interest. This policy requires researchers to disclose all significant financial interests. The threshold for a significant financial interest is $5,000 and encompasses all institutional responsibilities, not just those related to a federally funded project. The institution must report to the NIH the name of the investigator with a Conflict of Interest and how it is managed, the name of the entity, the nature of the conflict, its dollar value, how the conflict relates to sponsored research, and the basis on which the institution determined that there is a conflict. The information collected on significant financial interests must be publicly accessible on a website or by a written response to a request within 5 days. Each PHS investigator must complete training every 4 years, and the institution must conduct a retrospective review of noncompliance events and submit a report to the PHS awarding unit.

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  Organizational Ethics in Health Care

  Principles, Cases, and Practical Solutions

  • Philip J. Boyle, Edwin R. DuBose, Stephen J. Ellingson, David E. Guinn, David B. McCurdy(Authors)
  • 2004(Publication Date)
  • Jossey-Bass

    (Publisher)

  The more discretion an associate has in the exercise of his or her judgment, the more im-portant it is that the goals and mission of the organization guide that judgment (see Chapter Seven). There are times, however, when the appropriate decision or course of action is not clear. Associates do not operate in a vacuum or as automatons of the organization. They have their own interests, such as career ad-vancement, the desire for honor and prestige, family obligations, and independent financial interests. In most cases, they attempt to 146 honestly perform their jobs and find a way to harmonize indepen-dent interests with their obligation to the organization. A Conflict of Interest arises when these outside interests begin to intrude (or ap-pear to intrude) on the associate’s judgment about how to perform the job and how to conform to the mission of the institution. This is one of the most pervasive and important issues in organizational ethics. Defining Conflict of Interest The classic definition of a Conflict of Interest focuses on the existence of a personal interest, held by an employee possessing administra-tive authority for an organization, that runs counter to the interests of the organization. As defined by the 1993 Code of Ethics of the American College of Healthcare Executives, A Conflict of Interest may be only a matter of degree, but exists when the health care executive: A. Is in a position to benefit directly or indirectly by using authority or inside information, or allows a friend, relative, or associate to benefit from such authority or information [and] B. Uses authority or information to make a decision to intentionally affect the organization in an adverse manner. 1 According to this definition, a Conflict of Interest exists only if the health care executive with a competing interest intentionally uses his or her position for personal benefit at the expense of the organization.

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  License to Drill

  A Manual on Integrity Due Diligence for Licensing in Extractive Sectors

  • Cari L. Votava, Jeanne M. Hauch, Francesco Clementucci(Authors)
  • 2018(Publication Date)
  • World Bank

    (Publisher)

  Higher standards in terms of conflicts of interest are often applied to critical integrity agencies and officials—for example, to judiciary and law enforcement officials, in light of the importance of ensuring high integrity stan-dards and the potential risk and serious consequences where integrity standards are eroded or even perceived to be weak. Next, policy makers must choose a definition of Conflict of Interest and enact that definition in binding laws or regulations. A number of countries have devel-oped codes of conduct or ethics for specific sectors and government service functions that may be useful. For example, the United Kingdom recently updated Conflicts of Interest | 71 its regulations on public procurement with guidance on combating corruption and preventing conflicts of interest. It defines a Conflict of Interest as “any situa-tion where relevant staff members have, directly or indirectly, a financial, eco-nomic or other personal interest which might be perceived to compromise their impartiality and independence in the context of the concession contract award procedure.” 8 Similarly, it may be useful to define prohibited conflicts of interest in language such as: Agency personnel should be prohibited from any involvement in deci-sions concerning applications from persons to whom they are related (by family ties, business ties, or other strong bonds, including relationships to legal persons). Whatever the exact policy, it should be applied with fairness and clarity. Good practice safeguards in preventing abuse of discretion include requiring that discretionary decisions (1) be articulated in a text that summarizes the factors, analysis, and justification on which the decision is based and (2) be subjected to review and signature approval by at least two levels of officials. The agency may wish to have a mechanism to receive COI complaints from outside parties.

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  Ethics and Business

  An Integrated Approach for Business and Personal Success

  • Paul C. Godfrey, Laura E. Jacobus(Authors)
  • 2021(Publication Date)
  • Wiley

    (Publisher)

  124 CHAPTER 9 Conflicts of Interest Key Terms bonus compensation 119 code of conduct 121 commission 119 confidential information 119 corporate opportunity doctrine 120 disclosure process 121 education 121 ethical dilemmas 117 fiduciaries 120 loyalty 117 moral courage 117 moral imagination 118 moral temptations 117 nepotism 119 policy 120 post-training disclosure 121 relationships 120 second job 119 social media 119 start-up 120 training 121 use of equipment 119 vendors 118 Chapter Summary • Conflicts of interest in the workplace take the form of any and all activities that interferes with an employee’s obligations or loyalties to their employer. A conflict occurs when the employ- er’s and employees’ interests diverge and only one interest can be satisfied. Conflicts of interest are pervasive. They arise from three sources: first, transactions in which the employee rep- resents the company or makes recommendations or decisions about transactions; second, situations in which the potential exists for personal profit or gain from outside activities related to job activities; and third, situations that could lead to divided loyalties or present even the appearance of a conflict. • Because of their fiduciary duties, officers, directors, and execu- tives also may face decisions involving corporate opportunities, situations where something may be good for the firm and good for the officer, but it creates a real or perceived conflict of inter- est. The compliance and risk mitigation tools you’ve learned about in other chapters can all be employed to help employees and officers avoid conflicts of interest. These include policies, codes of conduct, codes of ethics, training, and disclosure poli- cies and protocols. • Individuals also need a values-based set of tools to help them avoid and resolve conflicts of interest, including company pol- icies and communication strategies.

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  Research Ethics

  • Kenneth D. Pimple(Author)
  • 2017(Publication Date)
  • Routledge

    (Publisher)

  14 a charge of a Conflict of Interest may indeed constitute an accusation, even in the absence of an otherwise improper motivation.

  STANDARDS FOR ASSESSING CONFLICTS OF INTEREST

  Standards for assessing conflicts of interest identify factors that make conflicts more or less problematic. The severity of a conflict depends on (1) the likelihood that professional judgment will be influenced, or appear to be influenced, by the secondary interest, and (2) the seriousness of the harm or wrong that is likely to result from such influence or its appearance.

  In assessing likelihood, we may reasonably assume that, within a certain range, the greater the value of the secondary interest (e.g., the size of the financial gain), the more probable its influence. Below a certain value, the gain is likely to have no effect; this is why de minimis standards (which define that value) are appropriate for some gifts. Also, the value should generally be measured in relation to typical income and to the scale of the practice or research project.

  Also affecting likelihood is the scope of conflict, in particular the nature of the relationship that generates the conflict. Longer and closer associations increase the problem. A continuing relationship as a member of the board or a limited partner of an industrial sponsor, for example, creates a more serious problem than the acceptance of a one-time grant or gift.

  The extent of discretion — that is, how much latitude a physician or researcher enjoys in exercising professional judgment — partly determines the range of probabilities. The more routine the treatment or the more closely it follows conventional professional practice, the less room there is for judgment and hence for improper influence. Also, the less independent authority the professional has in a particular case, the less latitude there is for improper influence. A conflict involving a laboratory technician, for example, is generally less severe than one involving a principal investigator.

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  Ethical Dilemmas in Emergency Medicine

  • Catherine Marco, Raquel Schears(Authors)
  • 2015(Publication Date)
  • Cambridge University Press

    (Publisher)

  13 Conflicts of Interest erika newton, md, mph, and adam j. singer, md introduction An Ancient Problem A conflict of interest (COI) is a clash between two interests held by an individual or institution wherein one interest threatens to undermine advocacy or impartiality toward the other. COI has been a source of concern and debate since ancient times. Plato’s Republic considered its political ramifications, while Hippocrates wrote of the profit motive in medicine: “Any wisdom . . . wherein works some scientific method, is honourable if it be not tainted with base love of gain and unseemliness.” COI in Medicine In the United States, as in most places, physician earnings are largely independent of the benefits that accrue to patients from effective med- ical care. Fee-for-service medicine, the dominant U.S. practice model, creates a COI for physicians by enabling them to earn more by doing more – for example, more procedures – even when more may not be needed. The other major financial COI in medicine is created by finan- cial largesse on the part of the drug and medical device industry. Gifts and payments to physicians and financial support for medical research, education, and informational resources have, together with congres- sional lobbying, placed industry in a position of considerable influence over patient care. Physicians also face an array of nonfinancial interests that may some- times be at odds with the needs of patients. These include personal beliefs, 179 ideals, and predilections; professional ambition; social obligations, such as to one’s family; and practical concerns. A Duty to Avoid COI Central to any discussion of COI in medicine is an understanding of physicians’ professional obligations toward patients.

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  Behavioural Finance

  • William Forbes(Author)
  • 2014(Publication Date)
  • Wiley

    (Publisher)

  Chapter 18 Analysts’ Conflicts of Interest ‘ Wall Street is about allocating capital. Great companies can get money easily – bad ones have to pay more of it. Wall Street gets paid by controlling access to that capital, and charging fees to get it. . . . The dirty little secret is that people on Wall Street keep half of all the revenue they generate ’ (Kessler 2003, p.81). Financial analysts often wear two hats: a marketing hat for drumming up trade and hence commissions and a research hat for giving ‘independent’ investment advice to clients regarding how best to invest their money. If the analysts’ employer, a merchant bank, is affiliated in some way to the company being followed then such ‘conflicts of interest’ between selling the stock and impartially reporting its prospects can become intense. Mehran and Stultz (2007) define a Conflict of Interest to be ‘a situation in which a party to a transaction can potentially gain by taking actions that adversely affect the counterparty’. Such conflicts of interest between the duty of an analyst to his employer and client have become the focus of major litigation in both the United States and the United Kingdom, but, as the above quote from Anson Beard (given in Kessler 2003), a senior banker at Morgan Stanley in the late 1990s, makes clear, it is almost a universal characteristic of the worldwide investment banking industry. A recent special issue of the Journal of Financial Economics confirms the renewed academic interest in this important area of professional practice’ (Mehran & Stultz 2007). The most famous illustration of this conflict was the 2004 Global Analyst Settlement by 10 US investment banks who gave poor advice about the prospects of dot.com companies. These investment banks agreed to pay $1.4 billion in settlement of threatened litigation arising from their clients’ losses.

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  The Good Lawyer

  A Student Guide to Law and Ethics

  • Adrian Evans(Author)
  • 2014(Publication Date)
  • Cambridge University Press

    (Publisher)

  Chapter 7 CONFLICTS OF LOYALTY AND INTEREST 7.1 Introduction: What is a conflict of interest and why are conflicts so difficult? Consider this vignette, which is constructed from a number of decided cases. Documents, faxes, emails and drinks You are working in a merger team on the 4th floor of a large transnational law firm. Your client is Emirates Airways, which has proposed a merger with QANTAS, now that their code share alliance is succeeding. On the 3rd floor, another team from your firm is working for QANTAS on the same issue. QANTAS is struggling financially, but both airlines have developed some con- fidence in each other and think they can save some legal costs by using just the one law firm – yours. The firm’s email system blocks the access of either team to emails from the other team, so that both teams can work independently of each other. But early one morning an email is copied to you from someone you think you remember meeting the previous evening at the firm’s cocktails event, which was held to celebrate the merger deal. You do not have any clear memory of the evening or what was said, but the email contains vague references to a financial problem in QANTAS, which seems to have debts that you know Emirates is not aware of. The author of the mail is proposing a 3rd floor meeting to discuss how this debt issue will be handled. You are immediately concerned. What should you do with the email? 155 A conflict of interest is a significant problem for all professionals, but especially for a lawyer. We must act only in the interests of those who entrust us with their secrets. The general idea is that we act for only one client at a time, so that we avoid a conflict of interest.

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  Economic Influences on the Development of Accounting in Firms

  • George J. Staubus(Author)
  • 2021(Publication Date)
  • Routledge

    (Publisher)

  contracts with resource suppliers and customers, so a firm could be characterized, for the purpose of this immediate discussion, as a “nexus of contracts.” (Jensen and Meckling, 1976) Contracting parties always have conflicts of interests; each is seeking the best deal for himself/herself. A few firm contracts also depend on accounting numbers, thus giving persons with conflicting interests reasons to be interested in the firm’s accounting. (Butterworth, Gibbins, and King, 1982)

  The view taken here is that stewardship, agency and contracting are concepts that emphasize limited subsets of the total set of interest conflicts that have influenced the development of accounting in firms. The total set should be examined. Another class of interest conflicts – those addressed in “social theory” and the literature of “critical accounting” – are not treated as conflicts shaping the development of accounting. Thus, “worker-management” strife and poor-rich “class warfare” have not been linked to specific accounting developments, so are not discussed here.

  Conflicts of interests as an influence on accounting are related to two influences discussed above. One is externalities. Conflicts of interests impair economic efficiency by causing decision makers incompletely to weigh the social costs and benefits of alternative courses of action, instead concentrating on self interests. The common results may be called Pareto suboptima or “decision externalities,” or individual externalities, because certain costs or benefits are omitted from the cost/benefit analyses of decision-making individuals or groups.

  The other previously-discussed influence supporting the role of conflicts of interests in the development of accounting is self-interest and opportunistic behavior. Two observations on the ubiquity of self-interest bear repeating. “(I)n all societies the typical individual continually pursues … the increase of that (which) he can claim as his.” Georgescu-Roegen, 1971, p. 320) A similar view: “The first theorem [of economics] says that individuals act so as to further their own interest, even when acting as members of a group.” (Alchian, 1958, p. 352) To some, the relationship of this view to the role of the instinct for self-preservation in human evolution (or that of other species) may be of great interest, but it need not be discussed here. A point that should be made here, however, is that the generality of the self-interest tendency is not vitiated by recognition of exceptional cases in which individuals choose cooperative or even altruistic strategies that appear to be against their own interests in the short run. Also, degrees of selfishness vary across individuals and in the same individual across circumstances and times. Nevertheless, if people act somewhat selfishly on at least a substantial minority of occasions, organization structures and accounting systems must be designed to cope with that tendency. As long as, and to the extent that, individuals look out for their own interests, those interests often will conflict. Accounting has developed in an environment in which the potential for such conflicts was widely recognized and, therefore, was influential.

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  Towards Efficient Public Procurement in Colombia

  • OECD(Author)
  • 2016(Publication Date)
  • OECD

    (Publisher)

  The guidelines state the importance of setting clear rules on what is expected of public officials in dealing with conflict-of-interest situations in order to provide a coherent and consistent approach to managing conflict-of-interest situations. They also list options for positive resolution or management of a continuing or pervasive conflict which could include one or more of several strategies as appropriate, for example: • divestment or liquidation of the interest by the public official • recusal of the public official from involvement in an affected decision-making process • restriction of access by the affected public official to particular information • transfer of the public official to duty in a non-conflicting function • re-arrangement of the public official’s duties and responsibilities • assigning of the conflicting interest in a genuinely “blind trust” arrangement • resignation of the public official from the conflicting private-capacity function • resignation of the public official from his/her public office. Source : OECD (2004), Managing Conflict of Interest in the Public Service: OECD Guidelines and Country Experiences , OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264104938-en . Proactive management of conflicts of interest through private interest disclosure Disclosure of private interests by public officials and making them public is an effective tool for managing Conflict of Interest. On the one hand, it holds public officials more accountable of their actions by making their private interests more transparent. On the other hand, it could raise concern over potential harming of the public officials’ privacy. Accordingly, countries should direct efforts to strike the right balance; increasing numbers of OECD countries apply more extensive disclosure requirements according to the seniority of the public officials or the nature of the positions concerned.

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